Use of Basic Indicators - Moving Average (MA) - Kakiforex | Forex markets for the smart money. Use of Basic Indicators - Moving Average (MA) Use of Basic Indicators - Moving Average (MA)

April 6, 2021

Use of Basic Indicators - Moving Average (MA)

 Moving Average (MA) means the Moving Average for a certain period of time. The specific period depends on the Time Frame we choose on the MT4 Platform and also how many Periods we set.


If MA200 on the Daily Time Frame means Moving Average for 200 days. (1 candlestick represents one day, so period 200 means 200x1 day equals 200 days)


If MA50 is on Time Frame H1, it means Moving Average for 50 Hours. (1 candlestick represents one hour, so period 50 means 50x1 hour equals 50 hours)


If MA15 is on Time Frame M5, it means Moving Average for 75 minutes. (1 candlestick represents a period of 5 minutes, so period 15 means 15x5 minutes equals 75 minutes)


This Moving Average will form a curved line, and like the example above, it depends on the Time Frame selected. Usually, easy analysis using Simple Moving Average (SMA) or Exponential Moving Average (EMA).


⦁ How to enter MA into MT4


1. Click Insert on the Menu above

2. Select Indicators> Trend> Moving Average


⦁ Set your Moving Average 


⦁ Use MA as Support and Resistance


Commonly used MAs are SMA 21, SMA 50, SMA 100, SMA 200


 I used the following colors for each MA

SMA 50: Blue

SMA 100: Pink

SMA 200: Red


Suitable Time Frames to use are TF H1, H4, and Daily.

 I use the Daily Time Frame


When the SMA lines are at the top of the current price, they will be Resistance and when it is at the bottom of the current price, it will be Support.


You can see, when the current price needs many days, that is 4 Daily Candlesticks to break (breakout) the SMA 21 line, and the SMA 21 from being Resistance to Support.


Looks if Candlestick stands pretty above the SMA 21 line, a bit hard to penetrate down. So when the price goes up, SMA 50, SMA 100, and SMA 200 will be resistant.


How to trade:


You can use the concept of trade on Support and Resistance sketched by a predefined SMA. For example, you can enter a SELL order by scalping, take 10-30 pips when the price touches the main SMA, namely SMA 21, SMA 50, SMA 100, and SMA 200.


Continue studying the next chapter.